Business are burdened with lots of taxes. So we have complied the list of all possible deduction that can help to save income tax on income from business or profession for the year 2020.

Here is the list to save tax to take tax benefit along with section number for reference.

Serial noBenefits/Deductions allowedSection
1Rent, rates, taxes, repairs (excluding capital expenditure) and insurance for premises30
2Repairs (excluding capital expenditure) and insurance of machinery, plant and furniture31
3Depreciation shall be allowed in respect of assets32(1)(i)
4Additional depreciation to be allowed at 20 % of actual cost of new plant and machinery.32(1)(iia)
5Investment allowance shall be allowed at 15% of actual cost of new asset acquired and installed.32AC
6Insurance premium covering risk of damage or destruction of stocks/stores36(1)(i)
7Medical insurance premium paid by any mode other than cash, to insure employee’s health under (a) scheme framed by GIC of India and approved by Central Government; or (b) scheme framed by any other insurer and approved by IRDA36(1)(ib)
8Bonus or commission paid to employees which would not have been payable as profit or dividend if it had not been paid as bonus or commission36(1)(ii)
9Interest paid in respect of capital borrowed for the purposes of the business or profession.36(1)(iii)
10Employer’s contributions to recognized provident fund and approved superannuation fund [subject to certain limits and conditions]36(1)(iv)
11Any sum paid by assessee-employer by way of contribution towards a pension scheme, as referred to in section 80CCD, on account of an employee to the extent it does not exceed 10 per cent of the employee’s salary in the previous year.36(1)(iva)
12Contributions to approved gratuity fund (Subject to certain limits and conditions)36(1)(v)
13Allowance in respect of animals which have died or become permanently useless (Subject to certain conditions)36(1)(vi)
14Bad debts which have been written off as irrecoverable in books of accounts. (Subject to certain conditions)36(1)(vii)
15Securities Transaction Tax paid36(1)(xv)
16Amount equal to commodities transaction tax paid by an assessee in respect of taxable commodities transactions entered into in the course of his business during the previous year is allowed as deduction36(1)(xvi)
17Amount of expenditure incurred by a co-operative society (engaged in business of manufacture of sugar) for purchase of sugarcane.36(1)(xvii)
18Marked to market loss or other expected loss as computed in accordance with the ICDS notified under section 145(2)36(1)(xviii)
19Any other expenditure [not being personal or capital expenditure and expenditure mentioned in sections 30 to 36] laid out wholly and exclusively for purposes of business or profession37(1)
20Interest, salary, bonus, commission or remuneration paid to partners (subject to certain conditions and limits)40(b)
21Amount received by individual member from HUF. [Subject to the provisions of Section 64(2)]10(2)
22Share of profit received by partners from a partnership firm.10(2A)
23Rent paid for furnished/unfurnished residential accommodation (Subject to certain conditions)80GG
24Deduction in respect of employment of new employees.80JJAA
25Deduction in respect of eligible start-up (subject to certain conditions)80- IAC
26Deductions in respect of profits and gains arising from affordable housing projects80-IBA
27Presumptive income of eligible business shall be 8 % of gross receipt or total turnover (if turnover or gross receipts of eligible business does not exceed Rs. 2 crore). Note: Presumptive income shall be calculated at rate of 6% in respect of total turnover or gross receipts which is received by an account payee cheque or draft or use of electronic clearing system or through such other electronic mode as may be prescribed.44AD
28Presumptive income of profession shall be 50% of gross receipt (if gross receipt of assessee does not exceed Rs. 50 lakh).44ADA
29For Heavy Goods Vehicle:

Rs. 1,000 per ton of gross vehicle weight for every month or part of a month during which the heavy goods vehicle is owned by assessee

For Other Goods Vehicle:

Rs. 7,500 for every month or part of a month during which the goods carriage is owned by assessee

Note: ‘Heavy goods vehicle’ means goods carriage vehicle the gross vehicle weight of which exceeds 12,000 kilograms.
44AE
30Taxes levied by local authority and borne by owner if paid in relevant year for house property income23(1), first proviso
31Standard deduction [30% of the annual value (gross annual value less municipal taxes)] for house property income24(a)
32Interest on borrowed capital (Rs. 30,000/Rs. 2,00,000, subject to specified conditions) for house property income24(b)
33 ■  Life insurance premium for policy :

 –    in case of individual, on life of assessee, assessee’s spouse and any child of assessee

 ■  Sum paid under a contract for a deferred annuity :

 –    in case of individual, on life of the individual, individual’s spouse and any child of the individual (however, contract should not contain an option to receive cash payment in lieu of annuity)

 ■  Sum deducted from salary payable to Government servant for securing deferred annuity or making provision for his wife/children [qualifying amount limited to 20% of salary]

 ■  Contributions by an individual made under Employees’ Provident Fund Scheme

 ■  Contribution to Public Provident Fund Account in the name of:

 –    in case of individual, such individual or his spouse or any child of such individual

 ■  Contribution by an employee to a recognised provident fund

 ■  Contribution by an employee to an approved superannuation fund

 ■  Subscription to any notified security or notified deposit scheme of the Central Government. For this purpose, Sukanya Samriddhi Account Scheme has been notified vide Notification No. 9/2015, dated 21.01.2015. Any sum deposited during the year in Sukanya Samriddhi Account by an individual would be eligible for deduction.

 ■  Amount can be deposited by an individual or in the name of girl child of an individual or in the name of the girl child for whom such an individual is the legal guardian.

 ■  Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]

 ■  Contribution for participation in unit-linked Insurance Plan of UTI :

 –    in case of an individual, in the name of the individual, his spouse or any child of such individual
 
 ■  Contribution to notified unit-linked insurance plan of LIC Mutual Fund [Dhanaraksha 1989]

 –    in the case of an individual, in the name of the individual, his spouse or any child of such individual
 
 ■  Subscription to notified deposit scheme or notified pension fund set up by National Housing Bank [Home Loan Account Scheme/National Housing Banks (Tax Saving) Term Deposit Scheme, 2008]

 ■  Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, college, school or other educational institution situated in India, for full time education of any 2 of his/her children

 ■  Certain payments for purchase/construction of residential house property

 ■  Subscription to notified schemes of (a) public sector companies engaged in providing long-term finance for purchase/construction of houses in India for residential purposes/(b) authority constituted under any law for satisfying need for housing accommodation or for planning, development or improvement of cities, towns and villages, or for both

 ■  Sum paid towards notified annuity plan of LIC (New Jeevan Dhara/New Jeevan Dhara-I/New Jeevan Akshay/New Jeevan Akshay-I/New Jeevan Akshay-II/Jeewan Akshay-III plan of LIC) or other insurer

 ■  Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)

 ■  Contribution by an individual to any pension fund set up by any mutual fund which is referred to in section 10(23D) or by the UTI (UTI Retirement Benefit Pension Fund)

 ■  Subscription to equity shares or debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions

 ■  Subscription to any units of any approved mutual fund referred to in section 10(23D), provided amount of subscription to such units is subscribed only in ‘eligible issue of capital’ referred to above.

 ■  Term deposits for a fixed period of not less than 5 years with a scheduled bank, and which is in accordance with a scheme11 framed and notified.

 ■  Subscription to notified bonds issued by the NABARD.

 ■  Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions)

 ■  5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)

 ■  Contribution to specified account of the pension scheme referred to in 80CCD, in case of central Government employee.
80C
34Contributions to certain pension funds of LIC or any other insurer (up to Rs. 1,50,000) (subject to certain conditions)80CCC
35Contribution to pension scheme notified by Central Government up to 10% of salary (subject to certain conditions and limits). Contribution made by employer shall also be allowed as deduction under 80CCD(2) while computing total income of the employee. However, amount of deduction could not exceed 14% of salary where contribution is made by central government and 10% of salary, where contribution is made by any other employee.80CCD
36Amount paid (in any mode other than cash) by an individual or HUF to LIC or other insurer to effect or keep in force an insurance on the health of specified person. An individual can also make payment to the Central Government health scheme and/or on account of preventive health check-up (subject to limit)
  ■  specified person means:

  –   In case of Individual – self, spouse, dependent children or parents

  ■  Deduction for preventive health check-up shall not exceed in aggregate Rs. 5,000.

  ■  Payment on account of preventive health check-up may be made in cash
80D
37Deduction of Rs. 75,000 (Rs. 1,25,000 in case of severe disability) to a resident individual/HUF where (a) any expenditure has been incurred for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability [as defined under Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995] (w.e.f. assessment year 2005-06 including autism, cerebral palsy and multiple disability as referred to in National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities Act, 1999), or (b) any amount is paid or deposited under an approved scheme framed in this behalf by the LIC or any other insurer or the Administrator or the specified company for the maintenance of a dependent, being a person with disability (subject to certain conditions)80DD
38Expenses actually paid for medical treatment of specified diseases and ailments subject to certain conditions80DDB
39Amount paid out of income chargeable to tax by way of payment of interest on loan taken from financial institution/approved charitable institution for pursuing higher education (subject to certain conditions) (maximum period : 8 years)80E
40Interest payable on loan taken by an individual from any financial institution for the purpose of acquisition of a residential house property subject to certain condition. (Maximum deduction 50,000)80EE
41Interest payable on loan taken by an individual, who is not eligible to claim deduction under 80EE, from any financial institution for the purpose of acquisition of a residential house property subject to certain condition. (Maximum deduction 1,50,000)80EEA
42Interest payable on loan taken by an individual from any financial institution for the purpose of purchase of an electric vehicle subject to certain condition. (Maximum deduction 1,50,000)80EEB
43Donations to certain approved funds, trusts, charitable institutions/donations for renovation or repairs of notified temples, etc.80G
44Individuals not receiving any house rent allowance – Rent paid in excess of 10% of total income for furnished/unfurnished resi-dential accommodation (subject to maximum of Rs. 5,000 p.m. or 25% of total income, whichever is less) (subject to certain conditions)80GG
45Certain donations for scientific, social or statistical research or rural development programme or for carrying out an eligible project or scheme or National Urban Poverty Eradication Fund (subject to certain conditions)80GGA
46Sum contributed to any political party/electoral trust2480GGC
47 Interest on deposits in savings bank accounts (up to Rs. 10,000 per year)80TTA
48Interest on deposit in saving account or fixed deposit (upto Rs. 50,000 per year) for senior citizen80TTB
49Deduction of Rs. 75,000 to a resident individual who, at any time during the previous year, is certified by the medical authority to be a person with disability; In the case of a person with severe disability, allowable deduction is Rs. 1,25,000] (subject to certain conditions).80U
50Tax rebate in case of individual resident in India, whose total income does not exceed Rs. 5,00,000 quantum of rebate shall be an amount equal to hundred per cent of such income-tax or an amount of Rs. 12,500, whichever is less.87A
50 Deductions to Save Tax on Business Income

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